Monday, February 23, 2015
What are Some of the Best Ways to Build a Savings Account?
Having a savings account may make it easier to get through tough financial times or generally rely less on credit for large purchases. The good news is that anyone can build their savings no matter how much or how little they make. Let's take a look at some strategies that can be used to build a tangible savings account.
The 52-Week Saving Strategy
The first strategy that you may wish to take on has you start with a contribution of $1 the first week of the year and an additional dollar per week. This means that you pay $1 in the first week of January, $2 in the second week of January and $3 in the third week of January. During the final week of the year, you will put $52 in your bank account. If you miss a week due to financial issues, you can simply pick up where you left off the next week.
Have a Portion of Your Paycheck Put Into a Separate Bank Account
It is hard to miss your money if you don't know that you had it in the first place. By putting a portion of your paycheck into a separate bank account that you have no or limited access to, you can build up a nice emergency fund that you won't be tempted to touch unless you actually need it. An alternative may be to put some of your paycheck into a health savings account. While you can only use that money for health care needs, it still shields you from a potential financial crisis if you get sick.
Put Large Windfalls Into Your Savings Account
If you get a bonus at work, you should put that money directly into your savings account. If you sell your home or other property and reap a large profit, a large portion of that money can go into your savings account. The same is true if you receive a tax refund each April or if you win a large lottery prize. Putting large sums in the bank makes it harder to spend on things you don't need while protecting your future.
There are many great ways to build your savings account that fit your needs and your long-term goals. Whatever you are able to contribute, putting money into a savings account may make it easier to pay for school, buy a home or have an emergency fund that you can draw from when you need it.
Jonah Engler is a successful entrepreneur, investor, franchise owner and coffee lover who hails from New York City.